Understanding category management key in planograms for retail success

Source: © 123rf 123rf Bernhardt van der Merwe, head category management, DataOrbis says understanding retail category management is essential in planograms

It is widely acknowledged that category management – even if only at a basic level – leads to improved performance and enhanced profitability.

Planograms that is space planning

One of the most used and go-to tactics in the category management process is space planning, and more specifically planograms.

This is a detailed visual representation of how products are to be merchandised and is based on combining category, financial, shopper and market insights.

It is a schematic that shows how and where specific products should be placed on retail shelves, or in displays if they are to increase customer purchases – which is the name of the game.

Planogrammer or category analyst

An effective planogram is only achieved by a specialist skilled in this discipline, often referred to as a ‘planogrammer’ or category analyst.

Here, the word ‘skilled’ is not merely defined as the ability to use planogram software effectively or construct planograms in line with predetermined merchandising principles. It refers to a profound understanding and comprehension of category management theory in its broader context.

Planogram benefits

The analysis of past and current sales, shopper, market, and category insights, a planogrammer can make successful recommendations about the best flow of categories and adjacencies that may stimulate basket penetration, frequency and weight.

Key benefits of planograms include increased efficiency, maximised retail store space, increased customer satisfaction, visual appeal, and higher revenue.

Bernhardt van der Merwe, head category management, DataOrbis

What category management covers

Based on my experience, category management theory is often not highlighted as a key area of study for planogrammers.

This is unfortunate as it would assist these skilled individuals to understand how all the parts of category management fit together and affect each other.

Here's what it covers:

• Basic ideas like the 8-step category management process and why it's important to align category strategies and tactics with the overall business goals.<

  li>Models that explain how various parts of category management interconnect, like the relationship between category role, range selection, and space allocation.

• Research from academics and industry sources reveals the best way to manage distinct categories.

• Reviews of an array of category management methods, looking at their strengths, weaknesses, and how they work in various situations or for different categories.

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A more beneficial approach

Some years ago I worked with a retailer who was establishing category management as a new function within the business.

As part of the implementation process, they trained all levels of staff including directors, in the principles of category management theory.

This engendered buy-in at every echelon and led to stronger programme support throughout the company and enhanced teamwork across stakeholders.

What emerged from this approach was that teaching planogrammers category management theory first, followed by software training and the basics of how to construct a planogram, was more beneficial than just focusing on software and construction alone.

It became apparent that this provided them with a much stronger foundation that guided their thinking when constructing planograms.

The broader context and deeper understanding empowered them with the ability to confidently recommend changes to the status quo or even challenge merchandising rules that may have become ineffective.

For example, understanding how shopper missions and basket penetration are interlinked helped them to highlight better ways to place and arrange products on shelves.

A cross-functional understanding

Planogrammers who understand category management theory can explain the reasons behind their decisions and collaborate more smoothly with colleagues from different areas.

This cross-functional understanding improves teamwork and ensures that the planograms support the company’s overall strategy, making them more effective and cohesive.

Once planogrammers understand the theory behind their work, they tend to use planogram software solutions more effectively.

Instead of constructing planograms in a ‘do-as-I-was-shown’ fashion, this approach helps them explore and take full advantage of software functionalities to test and measure different merchandising approaches, aiming to reach specific planogram goals faster and more effectively.

For example, they use analytical functionalities to measure key performance indicators, to help place products in the best spots in terms of strategic goals.

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Great at on-shelf strategy

For planogrammers, learning the theory behind category management before or in tandem with learning to use software and planogram construction, is helpful.

This approach engenders a deeper understanding of the goals and principles while at the same time improving critical thinking while improving critical thinking skills.

All this makes it easier to work with others and communicate and it drives optimal use of technology tools.

This well-rounded approach ensures that planogrammers are not simply good with the software but also great at on-shelf strategy, extending their value within the organisation.